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Walk away at this point? - Page 4

post #61 of 91

i would go for it, growing up next to family is so awesome for kids (ime). i wish everyone who wanted to jump ship would just do it and get it over with already. then prices could return to "normal" ...

post #62 of 91
Quote:
Originally Posted by ellairiesmom View Post


 


I thought I had mentioned this in my op but it looks like I didn't...ooops!  DH is an only child, his mother deceased.  There isn't anyone else.  DH is his sole bene. 

 

We asked our lawyer to come up with something that would "protect" FIL the best we could & she suggested a triple net lease.  My FIL is of the mindset that we don't need it, but we feel better about having it so he doesn't have to worry about being responsible for anything related to the house. 

 



I think this decreases the potential messiness a lot.  DH and I both have two sibilings I tend to assume most everybody else does too. The only two concerns would be if FIL were to remarry (which could be very messy) or if he needed long term care (not near as messy and most likely would just mean he possibily couldn't afford to subsidize you if you needed it like he can now). 

 

post #63 of 91
Quote:
Originally Posted by ChristyMarie View Post


 


 

This argument doesn't really work.

 

In the cell phone example you are paying the agreed upon penalty to legally terminate the contract. 


In the walking away from a mortgage example you are illegally breaking a contract without paying the agreed upon penalty and basically saying "sue me" which means the injured party needs to wait, pay legal fees and gamble on the court system to receive what is legally theirs.


Having to recently go through this because of someone breaking a legal contract I can say it is a horrible thing to do to someone.  Yes, you can sue but that takes a lot of time, causes a lot of stress and costs a LOT of money.  And people who break contracts ILLEGALLY realize what a pain it is to sue them.  And what a bigger problem it can be to collect on any monies awarded by the courts.

 



This is why mortgage companies charge you interest.  It's not as if they are lending you money and entering into a contract with you out of the goodness of their hearts.  They take a calculated risk (whether properly or improperly calculated), as does a mortgagee when you purchase a house.  Part of the payment for that risk is the interest you pay them.  Part of the recourse they have is selling the house should you stop payments.

 

post #64 of 91
Quote:
Originally Posted by ChristyMarie View Post

 


Very wise words.

 

I would think long and hard before doing something with such questionable moral and legal issues attached to it.

 



Corporations walk away from their debts all the time, and we don't question them.  I have no sympathy for these banks.  They are the ones who started the whole housing market crash anyways with giving out faulty mortgages, but you don't see them being punished.

post #65 of 91

just wanted to say "Good luck" Hope your house sells quick!

post #66 of 91
Thread Starter 

I thought I would come back & update my thread...lots happening here.  We had a new buyer come through mid July & are Under Contract again right now.  They are getting our house for very cheap...about $15k lower than the Comps & what it is appraising for (we knew a current appraisal because of a buyer back in April) but we couldn't get them up to a more fair price & need to get out of here.  The taxes are just killing us.  It is just enough to pay what we owe & cover the sellers transfer tax etc.  Of course, while we were in Attorney Review, we got a 2nd offer for $10k more, but decided that the karma of going down that route after already being in the process of another deal was not something we wanted to mess with at this point.  The current buyers had already brought their family back to see the house etc.  We just felt it was asking for trouble & to just let things continue the way they were going...our luck, we would have entertained the higher offer but something would have gone wrong & we would have ended up with no buyers again.

 

We had already started to move forward on my father in law purchasing the house near family but things fell apart there after we did all the Inspections.  (We stopped paying our Mortgage here as of 7/1 so that we could be in a position to go the Short Sale route by August)  Turned out they had lied about some pretty major stuff & we tried so hard to work with them but in the end, they just didn't want to do the right thing.  We lost our Inspection $ but in the long run, saved ourselves a world of headaches & $ down the road. 

 

I talk to Chase daily & update them that we now have another Buyer.  Of course they still call us everyday.  Our credit will take a slight hit for a 30 day late but hopefully, the sale will go through & by September, we will be all paid off & moving on.  I got the official pay off amts from them as of 9/1 & 9/15 & we are good.

 

We had to find another home since we actually had a buyer so we went back out & stumbled upon one that had just come on the market, still about 5 mins from my family, same price but much more house & property.  Taxes are even a few hundred less.  We are doing the Inspections on Tuesday there & hoping all is good.  We really love this home & can see growing old there.  Fingers crossed.

 

Of course, once our Buyers got out of Attorney Review here the other day, the wife turned into Godzilla & is tormenting us over the agreed closing date being a week later than she wants.  Grrrrr.  The house we are buying doesn't want to close until 9/15 so our Buyer wants us to go rent somewhere for a week so she can close on 9/9.  We tried to explain that at the price we are selling to them for, there is absolutely no $ left for us to move things twice, rent or stay in a hotel for a week & put our stuff in storage just so that she doesn't have to drive her kids 20 mins to the schools here for one week.  And in the meantime, we are begging the Sellers on our new house to be out a week earlier so we don't have to deal with this woman freaking out if the closing isn't exactly as stated & she decides to serve us with Time of Essence or something crazy.  She is also doing an FHA Loan which can often take longer anyway, so her Mortgage might not even be done on time & she is carrying on & sending crazy emails to everyone.  Her Realtor & Attorney keep telling her to be careful because she could be the one not ready to close & we may not be too sympathetic if she doesn't just relax & let the dates fall the way they may.  And of course those other buyers, who were offering us more, were flexible on the closing date...sigh.  lol

 

Anyway-that's where we are at right now...things kind of ended up very differently than we thought they would, but of course could all change in a split 2nd as a result of inspection stuff etc.  We already did a bunch of updates after the last buyers' Inspections so we are done & have no $ left for anything they come at us with.  So next week will be interesting if she wants anything updated.  

 

Dh has made some progress with some clients on the Consulting side but still hasn't found anything full time.  I am working on launching my own Consulting business & will have a few ins on some waitressing gigs in my hometown once we are up there next month.  And I have gotten some good hours from my friend who is a Professional Organizer doing hoarding clean outs & such. (back breaking work but good $).  My father in law is helping us monthly for now & my own father (who never helps anyone) has offered to cover moving expenses.  So I think we can get by for now if we can just get out of this current high tax/high mortgage situation & do this downsize. 

 

post #67 of 91

ellariesmom - Sounds like some difficult times with everything, but things are hopefully coming to an end for it more or less.  Yay! for that.  

Just want to say that I'm hoping everything goes along smoothly from here on for you.   

post #68 of 91

What about considering a deed in lieu of foreclosure?  We are considering that having been on the market for over a year...

post #69 of 91
Thread Starter 

Yeah, right now, we are hoping this 4th potential buyer is finally the one.  If this one falls through though, we will get an approved Short Sale amt & try that.  If we don't get a buyer shortly after that, then we will offer the bank the deed.  At that point, they will have the choice of letting it sit as a Short Sale, accepting the deed or pursuing foreclosure. 

post #70 of 91
Quote:
Originally Posted by lookatreestar View Post

i would go for it, growing up next to family is so awesome for kids (ime). i wish everyone who wanted to jump ship would just do it and get it over with already. then prices could return to "normal" ...



If everyone who wanted to get out of their mortgage just walked away home prices would not return to "normal". The homes that people walked away from would possibly be bought for a more reasonable price but the people who DID NOT walk away from their mortgages would still owe what they bought the house for. This, if you ask me, punishes those of us who do stick it out and honor the contract we signed when we bought our homes. The housing crisis is only going to get worse if more people walk away from their homes.

post #71 of 91
Quote:
Originally Posted by erinsmom1996 View Post





If everyone who wanted to get out of their mortgage just walked away home prices would not return to "normal". The homes that people walked away from would possibly be bought for a more reasonable price but the people who DID NOT walk away from their mortgages would still owe what they bought the house for. This, if you ask me, punishes those of us who do stick it out and honor the contract we signed when we bought our homes. The housing crisis is only going to get worse if more people walk away from their homes.



has to get worse before it gets better... i still stick by what i said. if you don't want to be "punished" then ditch your house too.

post #72 of 91

and by "normal" i meant where housing was in 1996 or lower -before the bubble.

post #73 of 91
Thread Starter 

New update from OP

 

Well...we lost our buyers.  There is a retaining wall on our property & after 3 different inspections in 6 months not even mentioning it, now the latest Inspector says he feels the retaining wall is leaning & could be a risk down the road to the buyers.  I don't understand these inspections-each one picked up on different things, each time we fixed the more impt items, never anything major, but it's like a vicious cycle.  They wanted $25k off the price (the price already being well below the comps for our neighborhood & the lowest we could go without it being a short sale).  We offered $5k off, they said no & walked.

post #74 of 91
Quote:
Originally Posted by ellairiesmom View Post

New update from OP

 

Well...we lost our buyers.  There is a retaining wall on our property & after 3 different inspections in 6 months not even mentioning it, now the latest Inspector says he feels the retaining wall is leaning & could be a risk down the road to the buyers.  I don't understand these inspections-each one picked up on different things, each time we fixed the more impt items, never anything major, but it's like a vicious cycle.  They wanted $25k off the price (the price already being well below the comps for our neighborhood & the lowest we could go without it being a short sale).  We offered $5k off, they said no & walked.


hug.gif

 

post #75 of 91

Wow.  Sorry to hear about your update.  hug.gif

post #76 of 91
Quote:
Originally Posted by ellairiesmom View Post

Actually, that's a fallacy.  At least in NJ it is...our Real Estate Attorney explained it to me & I can't recall all the details as to the why, but the basic gist was that if we tried to keep a deposit (they were clear breaches of the contract too) we would get served papers pretty quickly ordering us to release the funds from escrow. 

 

 

This is false.  My father has been a broker for years and in 17 years of administering the test, apparently I was the first perfect score on the legal part of the real estate exam the administrator had ever seen.  If what you're saying is true about why these people walked away, that earnest money was yours and your lawyer is not dealing exclusively in real estate to not know that... which is not uncommon in NJ.  I had a client selling a house through me and tried to fire me because I advised him of an option that his lawyer said was illegal... despite the fact that the state had a tax for specifically for the situation I was suggesting.  eyesroll.gif  I have seen more than one transaction where buyers lose their earnest money in NJ.  And those laws have not changed recently.  Yes, if the buyer was ill-advised by a stupid attorney, they could certainly try to go after you to get their earnest money back; but they wouldn't win.


 

Quote:
Originally Posted by ellairiesmom View Post

New update from OP

 

Well...we lost our buyers.  There is a retaining wall on our property & after 3 different inspections in 6 months not even mentioning it, now the latest Inspector says he feels the retaining wall is leaning & could be a risk down the road to the buyers.  I don't understand these inspections-each one picked up on different things, each time we fixed the more impt items, never anything major, but it's like a vicious cycle.  They wanted $25k off the price (the price already being well below the comps for our neighborhood & the lowest we could go without it being a short sale).  We offered $5k off, they said no & walked.


And that is a valid reason to break a contract and have to return the earnest money, btw.  There are plenty of valid reasons to have a contract end where the earnest money gets returned.  "I'm having a hard time with my divorce and can't deal with this right now" is NOT one of them.  irked.gif

 

As for inspectors, there's no standard licensing for them--so each one has different experiences and levels of expertise.  They almost always find SOMEthing as a means of justifying their cost, I think.  We got screwed because they accused us of having mold in our attic--despite the fact that they didn't test for it.  So our options were: test for it at our expense and potentially have the test turn up something that the inspector didn't; or just remediate what they suspected to be mold as if it were mold... by a licensed remediator.

 

$1,200 to remediate old spots of dirt from when my 150yo attic had a leak and threw spots of dirty water on a window frame... because of an overzealous inspector.

 

It sounds like you aren't really looking for any advice, but I do hope things work out for you one way or another.

 

post #77 of 91
Thread Starter 

Heatherdeg-thx for your post.  My Attorney is an exclusive Real Estate Attorney & with one of the top practices in Northern NJ.  I also posted the situation on a Real Estate message board & was told there that keeping a deposit is one of the toughest things to do & that in NJ the courts most always side with the Buyer in that situation.  We just don't have a dime left to go to court to fight for keeping a deposit when in all likelihood, a Judge would find in her favor.  I suspect a recently divorced Mother of a 2 year old would win over the us folks who can't sell our house. 

 

And yes on the mold thing...2 of the 3 Inspectors dropped the word MOLD about our attic as well but then didn't provide any pictures or details. 

 

post #78 of 91
Quote:
Originally Posted by Rani View Post

Contracts have NOTHING to do with morality. they are contracts. Legal documents. Your credit would not be that damaged. Most credit agencies, while they note you are not paying, if you are paying all else on time, will not completely ruin your credit. It will go down some but not terriblly.  A mortgage is a contract and a contract can be rendered null and void.  People seem to have a mystical idea that because its a HOUSE, its different. Nope, its a financial decision ONLY. Now be aware, if you walk away, that shortsale/foreclosure process will take a minimum of a year if not most of two. And you will be required to keep trying to sell it which means still paying the utilities and such though not the taxes. 

 

Its your decision but use cold rational judgement and financial calculations which include the stress AND the fact that you will still need to pay some things to try to sell.  But do not fall into the "thats unethical" trap of thinking as it clouds your judgement with unnecessary emotionalism.  Think like a corporation. Is the contract still giving you what you want? If not, dissolve it.



 

And it's that attitude that has gotten our country into this mess in the first place. 

post #79 of 91
Quote:
Originally Posted by ellairiesmom View Post

Heatherdeg-thx for your post.  My Attorney is an exclusive Real Estate Attorney & with one of the top practices in Northern NJ.  I also posted the situation on a Real Estate message board & was told there that keeping a deposit is one of the toughest things to do & that in NJ the courts most always side with the Buyer in that situation.  We just don't have a dime left to go to court to fight for keeping a deposit when in all likelihood, a Judge would find in her favor.  I suspect a recently divorced Mother of a 2 year old would win over the us folks who can't sell our house. 

 

There are too many variables to what qualifies to break a contract and get your money back legally, so I'm going to assume there was more to the situation than the single sentence posted here.
 

 

post #80 of 91
Thread Starter 

Op with a loooooong update...there is a closed thread involving some "neighborhood drama" that made me want to come back & update my post.  In the closed thread, a poster suggested that the OP in that case had started another thread about her family not being able to afford the mortgage, therefore being jealous of a new family that moved into her neighborhood.  The OP never started a thread about the mortgage but it made my wonder if my thread was what someone thought about even though mine has nothing to do with neighbors or anything.  And then it struck me that I hadn't updated this thread at all & quite a few things have happened.  

 

We have another set of buyers who are accepting the property "as is".  They did their inspections & the only major thing this Inspector brought up was the retaining wall, which they were totally aware of & were told we weren't addressing.  The appraisal was done last week & we are anxiously awaiting the report & they should have their commitment letter by next week, closing in another week or 2.  They are really nice people who fell in love with our home the way we did 4 years ago.  They met us at the amt we needed to avoid the short sale (cutting it soooo close!) which was still less than the comps in the area but in this market, after all our disappointments, we agreed.  So in the end, we will lose about $150k from our orig investment 4 yrs ago & the upgrades we did, but we will be able to cover the outstanding mortgage.

 

We had missed 2 months of mortgage payments because we were preparing for the short sale & Chase wouldn't even talk to us if we were current.  I have never dealt with such ridiculous nonsense in my life.  Our Buyers wanted proof from Chase that we were that close to a Short Sale before they would agree to accept the house "as is" without any concessions but then Chase wouldn't give us a payoff amount calculated as of our closing date in writing unless we paid up what we owed.  We explained we were both unemployed, trying to get this sale through etc.  They wouldn't give us anything so we had to use some of what we had left to pay current so they would issue a letter indicating what we owed etc.  They charged us $30 for the letter too!!!  Chase has been such a nightmare to deal with...they kept taunting us with these "modification" options the whole time & then would tell us we didn't qualify because we were unemployed.  Then we would fall behind a week & they would offer them again but say we couldn't do it until we paid up.  It was a cycle of lies.  I hope to never have a reason to bank or finance with them ever again.  I continue to hear they are one of the ones with the worst consumer practices in the business.  Their foreclosure practices are under scrutiny big time too.  

 

In the meantime, the 2nd crack we took at buying a home (father in law putting mortgage in his name for a few years until we could get on the deed) was a major catastrophe.  There was an underground oil tank that had been abandoned (cut, cleaned & filled with rock) back in the 90s still on the property & we refused to proceed until they removed the tank.  They actually lied about the tank at 1st.  It was left off the Sellers Disclosure but I had pulled the permits from the town & questioned them.  Then they admitted it & said they were going to remove it, signed the contract agreeing to remove it.  They kept delaying it but told us to proceed with everything while they worked on scheduling the removal.  So we did inspection, expensive computer radon test, septic inspection twice due to a clog the 1st time, appraisal & title & then they pulled the tank & it turned out it had leaked really bad years ago.  We think they knew that & were hoping we would change our minds about making them pull it.  Thank god we didn't.  They also refused to turn over the well test results so we think they knew the oil had contaminated the ground water.  The DEP had to come in, assign a case # & now it's being cleaned up.  It will take awhile & then they have to get a No Further Action letter.  They are refusing to sell us the property now because they are pissed at us.  So, we lost about $3000 in expenses but saved ourselves another major headache & probably a fortune down the road.  

 

We realized that having our house sale fall through so many times & then 2 buys fall through-losing inspection money both times & more, was a sign that we are not meant to own right now.  We spent a month looking at every rental option within 2 hours of where we are, keeping us close to family, close to metro areas for higher job probability etc.  It was heartbreaking to find that rent was very close to what the mortgage & taxes were going to be in the new home with the low interest rate & downsizing we were doing.  We were freaking out at what we were finding in a lower price range.  We were finally ready to go with a townhouse that was only $300 less/month than our mortgage/taxes would have been & then the craziest turn of events happened.  

 

My Dad, who has never come through for his 4 kids much before (he left my Mom 20 years ago to marry his secretary & really screwed her financially) has been a little more involved since we all started having kids.  He tells me that the renters he has in their condo are breaking their lease and he is willing to let us live there for as long as we need if we could just cover the mortgage/taxes.  (It's about 15-20 mins from where we were originally looking-still close to all my family) This is half of what we were going to pay in a house or any rental.  It has good living space, tiny bedroom space, no yard & is in a community that has gone downhill a little.  (downhill as far as rural can go-nothing too serious)  We wouldn't be able to let our kids play out front unattended, but my kids are young so we can deal with that for awhile.  Hopefully we can get back on our feet in the next few years & be ready to buy again.  

 

We ran our own credit a month or so ago.  Chase reported the 60 day late & we both dropped 50 points.  We are still in the "good" range, but we used to be "very good" so we were disappointed.  We are hoping once the house closes & we pay it off, it won't take too long to get back up there.  

 

DH had a 3rd interview for a job in his field with a great company.  The salary is half of what he made before but it's a salary, not commission dependent so we can count on it.  I am praying, just praying it works out.  His confidence is at such a low & I know getting this position would boost him, not to mention, get us back on track.  He will have a much longer commute to the city but we were always prepared for that.  Once we are settled in, I am going to pursue some options for work that won't require us to use any daycare so we can make it worth it & really start to save again.  

 

This thread talked so much about the importance of honoring a "contract" that it made me think there should be consequences to the people who breached contracts with us on both ends.  We are completing the paperwork for Special Civil Court & will see what happens.  It costs $25 & we will represent ourselves since the Contracts & emails are pretty self explanatory.  A family member who is a Litigator specializing in Contracts & Real Estate looked over both & thinks we have very solid cases.  He says you sit down with a mediator & we will be expected to settle but at least it's something & addresses the breached Contracts.

 

Here's to better times, our closing going through, a job for DH & life finally settling down...praying.gif

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